Bharat Forge, Samvardhana In Spotlight On China's Potential Allowance Of Rare Earth Access To Indian Suppliers

Shares of auto parts makers Bharat Forge Ltd., Samvardhana Motherson International Ltd. and others were in focus on Wednesday after China indicated it is open to granting Indian component manufacturers licences to access rare earth materials, according to people familiar with the matter. The development comes even as domestic carmakers continue to ramp up production while inventories last.

Rare earth elements remain critical to modern car manufacturing. Magnets made with these materials are essential components in systems ranging from power windows and mirrors to air conditioning, oil pump sensors, and speakers. China currently controls over 90% of global rare earth refining capacity.

At least 10 Indian supplier applications are currently at the approval stage in China, the people said, requesting anonymity as the matter is private. In May, the Society of Indian Automotive Manufacturers, in coordination with India’s original equipment manufacturers, submitted a list of over 30 eligible suppliers to the government. No licences have been granted so far, the people confirmed. Approvals hinge on suppliers meeting China’s end-use clause, which mandates that rare earth materials be used solely for domestic, non-military applications.

Phone calls to India’s Ministry of Heavy Industries remained unanswered. SIAM declined to comment, citing the sensitive nature of ongoing discussions.

The licence process follows China’s move on April 4 to tighten control over rare earth exports after the US imposed steep tariffs. Beijing introduced a more stringent end-user certification requirement for rare earth materials. Under the new rules, an import licence will only be issued if a supplier meets the local, non-military end-use clause. The certification process can be lengthy, taking up to 45 days.

As of 09:15 a.m., the Nifty Auto and the benchmark Nifty 50 were trading at 0.20% and 0.05%, respectively:

• Sona BLW Precision Forgings was up 0.75%.

• Bosch rose 0.30%.

• Bharat Forge was up 0.25%.

• Amara Raja Batteries rose 0.22%.

• Samvardhana Motherson rose 0.16%.

• Exide was up 0.14%.

• RK Forgings rose 0.13%.